Secured creditors

Secured creditors have security over your assets, which entitles them to sell them in order to recuperate a debt. Examples are:

  • banks with a mortgage over a house
  • finance companies with a chattel mortgage, lease or bill of sale over a car, furniture or electrical goods
  • hire purchase arrangements where you have not paid the full amount
  • creditors secured by government legislation over houses and land, such as council/shire rates and water rates.

Unsecured creditors

Unsecured creditors generally have no right to recover where a person becomes bankrupt, which is why alternatives to bankruptcy are in their interest. Examples of unsecured creditors include:

  • banks, finance companies and credit unions for personal loans, credit cards and store cards
  • service providers, doctors, lawyers and tradespeople.

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